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part may file a petition addressed to the District Director of the internal revenue district in which the property was seized for remission or mitigation of the forfeiture of such property.
in which the property was seized to examine the property at any time prior to referral of the property to the U.S. Marshal for disposition. If, in the opinion of the Commissioner or his delegate it is necessary that such property be sold to prevent waste or expense, the Commissioner or his delegate shall cause the property to be appraised in accordance with the procedures set forth in $ 403.26(a)(2). The owner shall have such property returned to him upon giving a corporate surety bond pursuant to $403.28 in an amount equal to the appraised value of the property, to abide the final order, decree, or judgment of the court having cognizance of the case. The bond shall be conditioned to pay the amount of the appraised value to the Commissioner or his delegate, the U.S. Marshal, or otherwise, as may be ordered and directed by the court. The bond shall be filed by the Commissioner or his delegate with the U.S. Attorney for the district in which the proceedings may be commenced. If the owner of such property neglects or refuses to give such bond within a reasonable time considering the condition of the property, the Commissioner or his delegate shall request the U.S. Marshal to proceed to sell the property at public sale as soon as practicable and to pay the proceeds of sale, less reasonable costs of the seizure and sale, to the court to abide its final order, decree, or judgment. (Sec. 7322, 7323, 7324, 68A Stat. 869, 870, as amended; (26 U.S.C. 7322, 7323, 7324))
8 403.37 Form of the petition.
There is no standardized form provided or required by the Department of the Treasury for use in filing a petition for remission or mitigation of forfeiture. However, the petition should be typewritten on legal size paper; and must be executed under oath, prepared in triplicate, and addressed to the District Director of the internal revenue district in which the property was seized. All copies of original documents submitted as exhibits in support of allegations of the petition should be certified as true and accurate copies of originals. Each copy of the petition must contain a complete set of exhibits.
Subpart D-Remission or
Mitigation of Forfeitures 8403.35 Laws applicable.
Remission or mitigation of forfeitures shall be governed by the customs laws applicable to remission or mitigation of penalties as contained in 19 U.S.C. 1613 and 19 U.S.C. 1618. (Sec. 613, 46 Stat. 756, as amended, sec. 618, 46 Stat. 757, as amended, sec. 7327, 68A Stat. 871; (19 U.S.C. 1613, 1618, 26 U.S.C. 7327))
8 403.38 Contents of the petition.
(a) Description of the property. The petition should contain such a description of the property and such facts of the seizure as will enable the Commissioner or his delegate to identify the property.
(b) Statement regarding knowledge of seizure. In the event the petition is filed for the restoration of the proceeds derived from sale of the property pursuant to an administrative forfeiture, it should contain, or be supported by, satisfactory proof that the petitioner did not know and could not have known of the seizure prior to the declaration of forfeiture. (See also $ 403.39)
(c) Interest of petitioner. The petition should clearly and concisely indicate the nature and amount of his interest in the property on the date the petition is filed, and the facts relied upon to show that the petitioner was not willfully negligent and did not intend that the property be involved or used in violation of the internal revenue laws. Such petition may allege such other circumstances which in the opinion of the petitioner would justify the remission or mitigation of the forfeiture.
(d) Petitioner innocent party. If the petitioner did not commit the act which caused the seizure of his property, the petition should state how the property
8 403.36 Interest claimed.
Any person claiming an interest in property seized by an officer of the Internal Revenue Service as subject to administrative forfeiture under this
and, if the property has been sold, or is in the course of being sold, the expenses incurred relating to such sale.
8 403.39 Time of filing petition.
A complete petition for remission or mitigation must be filed before the expiration of three months after the sale or other disposition of the property with respect to which the petition is filed. For purposes of this part, the term “sale or other disposition" includes acquisition of the property for official use.
(Sec. 613, 46 Stat. 756, sec. 306, 49 Stat. 880; (19 U.S.C. 1613, 40 U.S.C. 304(k)))
8403.40 Place of filing.
The petition should be filed in triplicate with the District Director for the internal revenue district in which the property was seized.
came into the possession of the person whose act did cause the seizure, and it should also state that the petitioner had no knowledge or reason to believe that the property would be involved or used in violation of the internal revenue laws. If the petitioner knows, at the time he files the petition, that the person in whose possession the seized property was at the time of the seizure had a record or reputation for committing commercial crimes, the petitioner should state in the petition whether the petitioner knew of such record or reputation before the petitioner acquired his interest in the property or before such other person came into possession of the property, whichever occured later. For purposes of this paragraph, the term "commercial crimes" includes, but is not limited to any of the following federal or state crimes:
(1) Offenses against the revenue laws; burglary; counterfeiting, forgery; kidnapping; larceny; robbery; illegal sale or possession of deadly weapons; prostitution (including soliciting, procuring, pandering, white slaving, keeping house of ill fame, and like offenses); extortion; swindling and confidence games; and attempting to commit, conspiring to commit, compounding any of the foregoing crimes. Addiction to narcotic drugs and use of marijuana will be treated as commercial crimes.
(e) Documents supporting claim. The petition should be accompanied by copies, certified by the petitioner under oath as correct, of contracts, bills of sale, chattel mortgages, reports of investigators or credit reporting agencies, affidavits, and any other documents that would support the claims made in the petition.
(f) Costs. The petition should contain an undertaking to pay any costs assessed as a condition of allowance of the petition. Such costs include but are not limited to all expenses incurred in seizing and storing the property; the costs borne or to be borne by the United States; the taxes, if any, payable by the petitioner or imposed in respect of the property to which the petition relates; the penalty, if any, asserted by the Internal Revenue Service;
8 403.41 Discontinuance of administra
tive proceedings. If the petition is filed prior to sale or other disposition of the property, proceedings to effect such sale or aer disposition will be discontinued until the petition is either allowed or denied. 8403.42 Return of defective petition.
If the petition is defective in some correctable respect, the original of the petition will be returned by letter to the petitioner who will be allowed to submit a corrected petition, in triplicate, within a reasonable time.
8 403.43 Final action.
(a) Petitions for remission or mitigation of forfeiture. (1) The Commissioner or his delegate shall either allow or deny any petition filed pursuant to these regulations. Such allowance or denial will constitute final action. If he allows the petition, the Commissioner or his delegate shall state the conditions, if any, of the allowance.
(2) If he allows the petition, the Commissioner or his delegate may order the property returned to the petitioner, sold for the account of the petitioner, or, pursuant to agreement with the petitioner, acquired for official use.
(3) The Commissioner or his delegate shall notify the petitioner of the allowance or denial of the petition and, in
sires re-appraisal of the property, after notification as to the conditions of allowances of the petition, and makes written request therefor, undertaking in such request to pay, or to be liable for, the total costs of such re-appraisal. the property shall be re-appraised in the manner in which the original appraisal was made, and the conditions of allowance of the petition shall be modified to the extent required by such re-appraisal.
Subpart E-Appraiser's fees
the case of allowance, the conditions, if any, under which the Commissioner or his delegate allowed the petition.
(b) Offers in compromise of liability to forfeiture. The Commissioner or his delegate shall accept or reject any offer in compromise of the liability to forfeiture of personal property seized pursuant to $ 403.25 and such acceptance or rejection shall be a final action with respect to the offer. $403.44 Acquisition for official use and
sale for account of petitioner in the case of an allowed petition. (a) Acquisition for official use. The seized property may be purchased by the United States pursuant to agreement and retained for official use. Where the petitioner is the owner, the purchase price is the appraised value of the property less all costs. Where the petitioner is a creditor, the purchase price is the smaller of:
(1) The petitioner's equity, or (2) the appraised value of the property less the amount of all costs.
(b) Sale for account of petitioner. If the petitioner elects not to comply with the conditions, if any, set for the return of the property, the Commissioner or his delegate is authorized to sell the property. If the petitioner is the owner of the property, there is deducted from the proceeds of the sale all costs incident to the seizure, forfeiture, and sale. The Commissioner or his delegate shall pay to the petitioner, out of the proper appropriation, an amount equal to the balance, if any. Where the petitioner is a creditor, there is deducted from the proceeds of the sale all costs incident to the seizure, forfeiture, and sale, and the Commissioner or his delegate shall pay to the petitioner, out of the proper appropriation, an amount equal to the smaller of: (1) The balance, if any, or (2) the equity of the petitioner. $ 403.45 Re-appraisal of property in
volved in an allowed petition. In determining the nature and extent of the relief to be afforded a petitioner pursuant to $ 403.44 the value of the property with respect to which the petition has been allowed is the value of such property as determined by the appraisal
thereof made pursuant to $ 403.26(a)(2) but if the petitioner de
8 403.50 Rate of compensation.
Each appraiser selected under $ 403.26(a)(2) shall receive as compensation a reasonable fee not to exceed $15.00 per hour or portion thereof for the performance of such appraiser's duties in appraising property seized as subject to forfeiture under the internal revenue laws and this part. Because this regulation is nonsubstantive, liberalizing and essentially procedural, it is found unnecessary to issue it with notice and public procedure under subsection (b) of section 553 of title 5 of the United States Code or subject to the effective date limitation of subsection (d) of that section. (T.D. 7695, 45 FR 27932, Apr. 25, 1980)
Subpart F-Administrative Sale of
8 403.55 Alternative methods of sale.
When personal property forfeited administratively is to be sold, the Commissioner or his delegate shall cause a notice of sale to be placed in a newspaper of general circulation published in the judicial district wherein the seizure was made. The sale shall occur not less than 10 days from the date of the publication of the notice. At the discretion of the Commissioner or his delegate the forfeited personal property may be sold at public auction to the highest bidder on open, competitive bids, or sold to the highest bidder on sealed, competitive bids. (Sec. 7325, 68A Stat. 870, as amended; (26 U.S.C. 7325))
open, competitive bids, the notice of sale shall so specify, and state the date, hour, and place of such sale.
8403.56 All bids on unit basis.
All competitive bids shall be on a unit basis. Thus, for example, if a number of forfeited automobiles are advertised for sale at the same date, hour and place, whether or not in the same notice of sale, a separate individual bid is required as to each automobile. The Commissioner or his delegate will not accept one blanket bid to cover the entire group of automobiles offered for sale.
8 403.62 Sale on sealed, competitive
bids. If the property is to be sold to the highest bidder on sealed, competitive bids, the notice of sale shall so specify, and shall state the date, hour, and place of sale, and the date, hour, and place prior to the sale when and where prospective bidders may view the property and obtain necessary information. All sealed bids must be filed with the district director of the internal revenue district in which the property was seized before the sale. No bids will be accepted after the sale starts. At the appointed date, hour, and place of sale, all sealed bids timely filed shall be open in the presence of all bidders attending the sale, who shall have the privilege of inspecting the bids if they so desire.
8 403.57 Conditions of sale.
(a) No recourse. All personal property to be sold shall be offered for sale "as is" and without recourse against the United States.
(b) No guarantee. No guarantee or warranty, expressed or implied, shall be given or understood in respect of any forfeited property offered for sale.
(C) No sale. (1) The United States reserves the right to reject any bids.
(2) In a case in which all bids are rejected the Commissioner or his delegate shall re-advertise the property for sale in the manner prescribed in $ 403.55.
(d) One bid. When only one bid is received for a single unit of property such bid shall be the highest bid received for such property. (Sec. 7325, 68A Stat. 870, as amended (26 U.S.C. 7325 (1), (4)); sec. 7326, 72 Stat. 1429, as amended (26 U.S.C. 7326(a))) [T.D. 7433, 41 FR 39312, Sept. 15, 1976, as amended by T.D. 7525, 42 FR 64344, Dec. 23, 1977]
Subpart G-Disposal of Forteited Coin-Operated Gaming Devices
8 403.65 Authority for destruction.
The Commissioner or his delegate is authorized to order the destruction of any coin-operated gaming device as defined in I.R.C. section 4462 upon which a tax is imposed by I.R.C. section 4461, after the expiration of three months from the date of consummation of administrative forfeiture under any provision of I.R.C.
8 403.58 Acceptable forms of payment.
The only acceptable forms of payment shall be cash, cashier's check, certified check, or postal money order, in the amount of the accepted bid.
(Sec. 7326, 72 Stat. 1429, as amended (26 U.S.C. 7326))
$ 403.59 (Reserved]
PART 404—TEMPORARY REGULATIONS ON PROCEDURE AND ADMINISTRATION UNDER THE TAX REFORM ACT OF 1976
8 403.60 Purchaser entitled to bill of
sale, Each purchaser of administratively forfeited property is entitled to receive a suitable bill of sale.
Sec. 404.6048-1 Annual returns for foreign trusts
with a United States beneficiary. 404.6334(d)-1 Minimum exemption from levy
for wages, salary, or other income. AUTHORITY: Sec. 7805, Internal Revenue Code of 1954 (68A Stat. 917; 26 U.S.C. 7805), unless otherwise noted.
(e) Effective date. This section is effective for taxable periods ending on or after December 31, 1976. (Sec. 6048(c), Internal Revenue Code of 1954, 90 Stat. 1616 (26 U.S.C. 6048(c))) T.D. 7502, 42 FR 41856, Aug. 19, 1977]
$ 404.6048-1 Annual returns for foreign
trusts with a United States bene
ficiary. (a) Return required—(1) In general. Each taxpayer subject to tax under section 679 with respect to a foreign trust having one or more United States beneficiaries must file Form 3520-A, Annual Return of Foreign Trust with U.S. Beneficiaries, together with any additional schedules or other information required by the form or the instructions to the form. Form 3520-A must be filed even if the taxpayer is treated as the owner of a foreign trust under both section 679 and some other provision of subpart E of part I of subchapter J.
(2) Joint returns. If the taxpayer's spouse is also subject to tax under section 679 with respect to the same foreign trust for the same taxable year, and if both taxpayer and spouse file a joint return of income tax for that year, a single Form 3520-A may be filed jointly with respect to such trust for the year.
(b) Period covered by return. The period covered by the return required by this section is the taxable year of the taxpayer required to file the return, regardless of the period used by the trust for accounting or any other purpose.
(c) Time for filing—(1) In general. The return required by this section must be filed no later than the 15th day of the fourth month following the end of the taxable period covered by the return.
(2) Transitional rule. In the case of a return required by this section for a taxable period ending on or before June 30, 1977, the return must be filed no later than
(i) October 15, 1977, in the case of a taxpayer treated as an owner with respect to the trust under both section 679 and a provision of sections 672 through 678, or
(ii) December 31, 1977, in all other cases.
(3) Extensions of time for filing. For rules relating to extensions of time for filing, see section 6081 and the regulations thereunder.
(d) Place for filing. The return required by this section must be filed with the Director, Internal Revenue Service Center, 11601 Roosevelt Boulevard, Philadelphia, PA 19155.
8 404.6334(0)-1 Minimum exemption
from levy for wages, salary, or
other income. (a) In general. Under section 6331(a), if an individual liable for any tax neglects or refuses to pay such tax within 10 days after notice and demand, the tax may be collected by levy upon property or rights to property belonging such individual, including amounts payable to or received by him
wages, salary, or other income. Under section 6331(d)(3), a levy upon wages or salary is continuous from the date the levy is first made until the liability giving rise to the levy is satisfied or becomes unforceable by reason of lapse of time. Under section 6334(a)(9), however, certain amounts payable to or received by an individual as wages or salary for personal services, or as income from other sources, are exempt from levy. Under section 6334(d), amounts so exempt are determined by taking into account (1) the individual's payroll period, i.e., the basis (whether weekly, biweekly, semimonthly, monthly or otherwise) on which the individual is paid or receives wages, salary, or other income, and (2) the number of certain other persons dependent upon the individual for their support during each such payroll period. Paragraph (b) of this section prescribes rules for determining an individual's payroll period. Paragraph (c) of this section contains rules relating to the minimum amount of wages, salary, or other income which is exempt from levy for each such payroll period, and the additional amount which is exempt for each person who is claimed as a dependent of the individual pursuant to paragraph (d) of this section.
(b) Determination of payroll period. For purposes of determining the amount of wages, salary, or other income exempt from levy pursuant to section 6334(a)(9) and this section
(1) Regularly used calendar periods. In the case of a levy on wages, etc. paid on the basis of an established calendar